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Mexican President Prepares For Texas Meeting With President Bush; Gas Prices Nearing Record High

Aired March 4, 2004 - 18:00   ET


LOU DOBBS, CNN ANCHOR (voice-over): Tonight: The president of Mexico, Vicente Fox, prepares to meet President Bush. Fox wants it easier for Mexico's illegal aliens to enter this country.

Outsourcing overseas, it's a multibillion dollars business. Consultants are rushing to help companies ship hundreds of thousands of American jobs to cheap foreign labor markets.

Gasoline prices are soaring near a new record. The government says it's extremely concerned.

UNIDENTIFIED FEMALE: I feel as though these gas prices are going up by the minute. It's really, really ridiculous.

DOBBS: And U.S. Marines in Haiti, warriors or police officers? General David Grange's view in "Grange On Point" tonight.


ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, March 4. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

The president of Mexico, Vicente Fox, tomorrow travels to President Bush's ranch in Crawford, Texas, for what will be a two-day meeting. This is the first visit by Fox to President Bush's ranch. The Mexican president will try to convince President Bush to accept his views on a number of key issues, but one topic will dominate their talks.


DOBBS (voice-over): The top priority for President Fox in his meeting with President Bush is immigration.

VICENTE FOX, MEXICAN PRESIDENT: The idea, of course, is not to come to conclusions or definitions, but to work in furthering the agenda. We know it is going to take a long time, at least this whole year, before we reach any integrated agreement on migration.

DOBBS: Forty percent of Mexico's population lives in poverty. An estimated 10 to 12 million Mexicans live in this country illegally. They send back to Mexico $12 billion a year in remittances, the second largest source of income for Mexico after oil exports. President Fox wants President Bush to make it even easier for citizens to enter this country.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We must make our immigration laws more rational and more humane.

DOBBS: The president's proposal includes a temporary visa program and visas for workers here with proof of employment. Michael Teitelbaum, the former vice chairman of the U.S. Commission on Immigration Reform, says there's nothing more permanent than a temporary worker.

MICHAEL TEITELBAUM, FORMER VICE CHAIRMAN, U.S. COMMISSION ON IMMIGRATION REFORM: The notion that you can import large numbers, millions of temporary workers, who will not become permanent residents is contrary to all past experience. Large-scale programs that legalize undocumented aliens in a society do not clear the slate and make it possible to enforce the immigration laws more effectively.

DOBBS: And those laws are challenged every day. Last year, the U.S. Border Patrol apprehended nearly a million people trying to enter this country illegally. More than nine out of 10 of them were citizens of Mexico.


DOBBS: The Bush administration is considering making a significant concession to Mexico on the issue of border security. A top homeland security official today said millions of Mexicans who make short visits to this country may not need to be fingerprinted or photographed at the border.


ASA HUTCHINSON, UNDERSECRETARY FOR HOMELAND SECURITY: My recommendation would be that the border crossing cards when they are used as the 72-hour permit, then they should be exempt from the enrollment in US-VISIT. That would be my current opinion and then whenever they are used as a regular visa, they should be referred to secondary inspection for enrollment US-VISIT.


DOBBS: Hutchinson said his department is unlikely to make a final decision for at least another several days.

Manuel Delacruz (ph) is one worker who has a unique relationship with the U.S.-Mexican border. Delacruz is a United States citizen and he is a member of Mexico's Congress. Delacruz was elected last summer and says he hopes to create a new legislative district for Mexico's parliament, which would include Mexicans living in this country.

Energy Secretary Spencer Abraham today said the White House is extremely concerned about the recent spike in gasoline prices. The national average for regular unleaded gasoline is now $1.70 a gallon and rising.

Eric Philips reports.


ERIC PHILIPS, CNN CORRESPONDENT (voice-over): If you drive to and from work or if you drive for work, you know firsthand what analysts have been telling us for weeks now. Gas prices are up.

UNIDENTIFIED FEMALE: I feel as though these gas prices are going up by the minute. It's really, really ridiculous.

PHILIPS: Consider the rise in regular gasoline prices over just the last two weeks. On the East Coast, motorists have seen an increase of 3 cents over the last two weeks. In the Midwest, it's gone up 4 cents, 2 cents in the Gulf Coast states, 5 cents in the Rocky Mountain region, and a whopping 20 cents out West, reaching more than $2 a gallon.

UNIDENTIFIED MALE: I think that there's no reason for it whatsoever. And I think we, the consumers, are being gouged.

PHILIPS: Experts say, while it's unusual for prices to spike this early in the year, fuel refineries processing less oil is creating more problems.

JUSTIN MCNAULL, AAA: The global supply has been diminishing due to some cutbacks in OPEC production. And, at the same time, we've seen demand torque up as the economy is revved up. China is using a lot more crude oil.

PHILIPS: The founder of a Web site called says there's no good explanation for the skyrocketing prices.

BRAD PROCTOR, GASPRICEWATCH.COM: I look at these refinery closures. Those didn't just happen in a week. These were planned a year or two earlier. So the industry knew that these shortfalls were going to start to occur and should have been able to ramp up other capabilities to fill in for this.

PHILIPS: Industry analysts say, as usual, prices may go even higher as we approach Memorial Day.


PHILIPS: And the average consumer continues to get squeezed from yet another side. Remember, we're still in the winter season and natural gas prices are rises as well. According to the Energy Information Administration, the average household is paying between 9 and 13 percent more this winter to heat their home with natural gas than last winter -- Lou.

DOBBS: Eric, thank you very much. And crude oil has gone up $4 a barrel just in the past month, to add to all of that. Eric, thanks -- Eric Philips. In the Martha Stewart trial, jury deliberations today continued for a second straight day. The jury requested exhibits and transcripts of testimony on Martha Stewart's contact with her former broker around the time that she sold her ImClone stock. Stewart faces four charges and a possible sentence of 20 years in prison if found guilty of all the charges. The jury members have now gone home for the night. Deliberations resume tomorrow morning.

Turning to Iraq, the Army today said insurgents appear to have developed a new capability for long-range attacks against the coalition's headquarters in Baghdad. Brigadier General Martin Dempsey, commander of the 1st Armored Division, said insurgents have recently fired rockets from launchers nearly 20 miles from their target. Until eventually, the maximum range of those rockets was just over five miles.

Defense officials today said former members of Saddam Hussein's intelligence services have been working with a Jordanian terrorist with links to al Qaeda. U.S. officials say the Jordanian terrorist organized this week's attack in Baghdad and Karbala that killed nearly 200 Iraqis.

Our senior Pentagon correspondent, Jamie McIntyre, has the report -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Lou, as Iraqis mourn their dead from Tuesday's twin attacks, the U.S. commander in charge of U.S. forces in Iraq was even more unequivocal today that the violence is aimed at inciting a civil war and that the man behind the effort is Abu Musab al-Zarqawi, a Jordanian said to be a close associate of Osama bin Laden.

Yesterday, testifying before the House, General John Abizaid said -- quote -- "We have intelligence that ties Zarqawi to this attack. Today he went further, saying -- quote -- "There is no doubt that Zarqawi and his network, in conjunction with the former regime elements, perpetrated these attacks." Some of those -- quote -- "former regime elements," Abizaid says, includes former members of the Iraqi intelligence service.


GEN. JOHN ABIZAID, CMDR., U.S. CENTRAL COMMAND: A lot of their loyalty in the former regime elements seems to be shifting towards extremists. And certainly there are indications that, along with the professional terrorists groups such as Zarqawi, Ansar al-Islam, al Qaeda, others that are operating now in Iraq, that some of this former regime element capacity is cooperating with them.


MCINTYRE: Abizaid says the so-called foreign fighters are mostly coming in from Syria, but some are coming in through Northern Iran. Still, though, he said the overall number is very small compared to the homegrown insurgents. But they are having a deadly effect. The insurgency, he says the nature of it has changed and is much more at the Iraqi people themselves and the Iraqi security apparatus. And, Lou, one indicator of that, the number of Americans that lost their lives to hostile fire in Iraq in February was only 12. Compare that to the month before, when the number was 35 -- Lou.

DOBBS: Jamie, thank you very much -- Jamie McIntyre from the Pentagon tonight.

A surprising revelation today from Egyptian authorities. The brother of Osama bin Laden's deputy is in custody in Egypt. Egyptians officials say Mohammed al-Zawahiri has been held there for several years, in fact. He was sentenced in absentia in 1999 for helping to organize attacks by the radical Islamist group Islamic Jihad. His brother, Ayman al-Zawahiri, and Osama bin Laden are believed to now be hiding in the mountains on the border between Afghanistan and Pakistan.

Tonight, a dramatic victory in the Senate for opponents of overseas outsourcing. We'll have that report for you coming up next.

And consultants making big money advising and helping companies who want to ship American jobs to cheap overseas labor markets. Internet pioneer Marc Andreessen is one of those consultants. And he is our guest tonight.

And the battle for the White House, a new poll out tonight, President Bush defending his record on the economy -- all of that and a great deal more still ahead.


DOBBS: The Senate tonight voted overwhelmingly to block the use of federal money to export American jobs overseas. The amendment attached to a broader bill on corporate tax breaks was approved by a vote of 70 to 26. Senator Chris Dodd of Connecticut sponsored the amendment which would prevent companies from using money from federal contracts to outsource jobs overseas.

As we've been reporting here now for more than a year, the manufacturing company is this country in turmoil. Millions of jobs have been eliminated as hundreds of companies have either gone bankrupt or exported jobs to cheap overseas labor marketed. West Virginia workers are feeling the pain. And no industry there has been harder hit than the steel industry.

Louise Schiavone reports.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Tucked into a corner of West Virginia is what is left of the blast furnaces and buildings that produce badly needed steel all through World War II and kept at it during the prosperity that followed.

Although production fell off, the mill still employed 13,000 workers into the 1970s. Today, fewer than 3,000 jobs are left and the mill is bankrupt.

BILL ROGAWSKI, SHEET METAL OPERATOR: When you used to leave the mill at 3:00, you had an hour traffic jam just getting through the mill and the downtown was booming. You had your department stores, grocery stores, auto dealerships. And now you come up through Main Street and you don't see -- very little of that at all.

SCHIAVONE (on camera): Experts say the economy is expanding, but here in Weirton, West Virginia, where there are more layoffs at this steel mill, people are asking, where is my prosperity?

(voice-over): Across the nation, 2.8 million manufacturing jobs have evaporated since President Bush took office, but workers here remember the fight over NAFTA, President Clinton's triumph, and find plenty to dislike in both parties.

MARK GLYPTIS, PRESIDENT, INTERNATIONAL STEELWORKERS UNION: I don't think we need a president that does not keep his promises.

RICK CASINA, MAINTENANCE MECHANIC: All we want people to do is get out of our way and let us make steel.

SCHIAVONE: Analysts say that while the economy is coming around in advance of this year's election, the most untrusting voters will be in hard-hit manufacturing states.

ANDY LAPERRIERE, ISI GROUP: The loss of manufacturing jobs has been so severe over the last few years that that's really the focal point for the political debate.

SCHIAVONE: Losing jobs has been painful in Weirton, where we found a striking lack of optimism, a feeling that no matter which party gains the White House in November that their fate has already been determined.

Louise Schiavone for CNN, Weirton, West Virginia.


DOBBS: And turning to the issue of immigration and the subject of our poll question tonight: Do you believe we should vigorously enforce our immigration laws, yes or no? Please cast your vote at We'll be bringing you the results.

And from a lack of law enforcement to a lack of education, you won't believe what passes for learning at one of this country's universities in at least one class.

Plus "Exporting America" tonight, the companies that make it easy to outsource. I'll be joined by Internet pioneer Marc Andreessen, who says outsourcing is good for us. California State Senator Liz Figueroa joins us as well. She has introduced legislation to stop the threat of outsourcing and our privacy.

President Bush and Senator Kerry squaring off on the issue of jobs, as a new opinion poll offers a preview of what looks to be a very difficult race.

Stay with us.


DOBBS: The growing list of companies that are exporting American jobs to cheap foreign labor markets are not doing it by themselves. There is now a growing multibillion dollar industry that's helping these companies send American work overseas.

Bill Tucker reports.


BILL TUCKER, CNN CORRESPONDENT (voice-over): The list of companies which outsource and offshore work is a long one and filled with some impressive name and the type of work being offshored has gone way beyond call centers.

TOM RODENHAUSER, CONSULTING INFORMATION SERVICE: Once a company decides to outsource, they are predicating their decision based on price, so the natural inclination is to go with the lowest cost provider. And that segues right into offshoring.

TUCKER: All made possible by the Internet, developed by Americans. U.S. businesses spent $16 billion on offshoring work last year, according to Gartner (ph), and India gets the lion's share of that work. Some of the biggest names in the field are Infosys, Tata Industries, Wipro.

Consultants often play a role as the middleman, connecting companies with offshore providers, holding conferences to help companies outsource and offshore work. It's a large and fast growing business. Conferences are heavily attended and often protested by workers displaced by outsourcing. One consultant makes a simple point. If we don't like the offshoring trend, we have no one to blame but ourselves.

MICHAEL CORBETT, MICHAEL CORBETT & ASSOCIATES: As customers, we demand the lowest possible price and the highest quality on our products and services. As shareholders, every time we open up our 401(k) statement, we're looking at the returns from our investments, and so the pressure on businesses to constantly improve their operations is relentless.

TUCKER: But not every company that outsources offshores. Case in point, Healthcare Management Resources, which handles billing and patient account services for 90 hospitals around the country.

DENNIS SWARTZ, CEO, HEALTHCARE MANAGEMENT RESOURCES: Outsourcing domestic has a tremendous advantage. The best situation is to have the local people that understand the culture, understand customs, and can effectively deal with the problems that arise.

TUCKER: HMR currently operates two call centers in Tennessee and employs 425 people. (END VIDEOTAPE)

TUCKER: One industry observer, Gartner (ph), warns that the jobs that are being loss to offshore are not cyclical. They are not likely to ever be coming back, Lou.

DOBBS: Thank you very much, Bill. Appreciate it.

Education playing an important role in international competitiveness and for most college students in this country, final exam requires hours of preparation and study and memorizing facts and figures. But there are some student at the University of Georgia who have had a somewhat easier time of it because of a former assistant basketball coach by the name of Jim Harrick Jr.

The NCAA found that Harrick violated rules. And one of the violations was academic fraud. Students taking his class called Coaching Principles and Strategies of Basketball were given only one test. That test consisted of 20 multiple choice questions that we certainly hope are not typical of higher education in any part of this country or any part of the University of Georgia, for example.

Let's take a look at the test. You may want to mark these down as we go. First question, how many goals are on a basketball court, one, two, three or four? How many halves are in a college basketball game? I'd like to repeat that one. How many halves are in a college basketball game, one, two, three or four? This is perhaps the toughest question of all. How many points does a three-point field goal account for in a basketball game, one, two, three or four?

You probably won't be surprised to learn that everyone in assistant coach's Harrick's class received an A. We hope you did, too.

Still ahead here, a pioneer of Silicon Valley now runs a company that helps other firms export American jobs the cheap foreign labor markets. Marc Andreessen will be our guest. And we'll be joined by California State Senator Liz Figueroa, who is fighting not only outsourcing, but trying to protect American privacy.

Also, President Bush makes his first campaign visit to the country's most populous state. We'll have a live report for you from California.

And tonight, "Grange On Point." U.S. Marines in Haiti, more like cops, more like Marines? Mission creep? General David Grange will tell us in "Grange On Point."

Please stay with us.


DOBBS: In a moment, I'll be talking with a California lawmaker who says outsourcing has devastated her constituents in Silicon Valley. I'll be joined by State Senator Liz Figueroa. But, first, Marc Andreessen is an Internet pioneer. He co- founded a Silicon Valley firm that helps companies outsource work overseas. He's the chairman of the company Opsware. He also, of course, co-founded Netscape.

Marc Andreessen joins us tonight from Mountain View, California.

Marc, good to have you here.


DOBBS: There are very few issues right now that are more difficult for corporate America to deal with than the issue of outsourcing. You support it. You support it vigorously. Why?


I think it's purely good for the American company and it's good for American workers. It's part of the natural process of creating new jobs. I think job destruction and job creation go hand in hand. In the last 10 years, this economy has destroyed 325 million jobs and created 342 million new jobs. And, in general, those news jobs are better jobs than the ones that were destroyed.

And I think, in the next 10 years, we're going to destroy another 400 million, create another 430, 450 million new jobs, and those jobs will be better. I think it's blue skies.

DOBBS: Mark, I quite appreciate job destruction, job creation and the net effect. And that argument is advanced considerably. But that argument doesn't really work if the net result is not a higher value job and that has not occurred in this country now for three years, and perhaps more, actually.

That being the case, why should we accept it as a matter of faith that we can destroy lives -- and it is looking as though -- some estimates range as high as three million jobs have been outsourced now to cheap overseas labor markets.


DOBBS: Why should we take it as an article of faith that that kind of pain results in better jobs, when we're not seeing it demonstrated in any of the data anywhere?

ANDREESSEN: Right. So, first of all, nobody cares more about the pain caused by job destruction than I do.

I grew up in Wisconsin. And, as you know, in Wisconsin, there have just been a huge number of jobs lost over the last 80, 90 years from agriculture. And when I was growing up, that process was continuing. The flip side of that is, new jobs were created and in general people in Wisconsin have a higher standard of living and higher per capita income now.


DOBBS: I understand that, Marc.


ANDREESSEN: That exact same thing...

DOBBS: But what I'm asking you for, why should we take it as an article of faith when we have not seen this happen for four -- nearly four years?

ANDREESSEN: Right, because, for four years, we've been in a recession. If you look at the impact of the recession, it's almost entirely responsible for what is going on.

So let me give you a couple other numbers. In the last 15 years, the number of Americans employed by foreign companies has gone up from 2.5 million to 6.5 million. Offset against that is, yes, American companies now employ 10 million people overseas. But do you think we pay overseas people more or less than foreign companies are paying the American workers?


DOBBS: That's a different issue, Marc.


DOBBS: I have got to interrupt you, Marc.


DOBBS: That is not outsourcing. That is not exporting jobs overseas.

ANDREESSEN: Sure, it is.

DOBBS: If I may finish, then I'll


ANDREESSEN: Cars are now being manufactured in the United States by Japanese car companies like Toyota. They're outsourcing to us all over the place. There's all kinds of jobs. Siemens is manufacturing new jobs to the United States.


DOBBS: Are they doing that, Marc, to produce products for this market?

ANDREESSEN: Sure, absolutely, they are doing that.


DOBBS: That's right. And that's the distinction. And that's the distinction here.

The service jobs, the high-value jobs that are being exported to various countries around the world are not being exported so -- for entry to those markets of those countries, but rather for the return of those services and products to this market. That is the distinction in outsourcing, Marc.


ANDREESSEN: Actually, that's not entirely true.


DOBBS: Well, no, it's actually -- it's entirely true.

ANDREESSEN: Well, the data doesn't actually show that. So, for example, let's look at it a different way.

DOBBS: What data? I would like to know.

ANDREESSEN: It doesn't make any economic sense.

So, for example, I guess the implication is, we're shipping dollars overseas and those dollars are staying overseas and they're never coming back. We're creating economic growth in the U.S. We're creating economic growth overseas. When we put jobs in India, we're paying Indians in U.S. dollars. Those dollars are being turned around and spent on American goods and services. The new middle class in India that's emerging as a result of the I.P. offshoring...


DOBBS: Oh, I assure you..

ANDREESSEN: They're buying Levi's jeans. They're buying Nike shoes. They're buying Apple iPods. They're buying Merrill Lynch financial services. We are creating new markets all over the world as a process in doing this.

DOBBS: It's -- that is absolutely true. Markets are being created. Middle-class jobs are being created in India, as you suggest.


DOBBS: There is just one problem with that.

ANDREESSEN: And those -- and those people are consuming American products and services.

DOBBS: They are assuming about half what we're buying from them right now.

ANDEREESSEN: Actually that's not true.

DOBBS: Actually it is exactly true. The deficit with India is -- for this instance is precisely twice.

ANDEREESSEN: For manufactured products that's true. Look at services.

Do you think we run a services deficit or surplus?

DOBBS: Marc, you were saying what?


DOBBS: Were you not talking about buying products?

ANDEREESSEN: Products and services. We run a deficit on products. The difference in the dollar comes back in investing America. We run a surplus in services. Lou, we run a $75 billion a year services surplus. $75 billion...

DOBBS: Are you talking about globally, Marc.

ANDEREESSEN: Yes, globally.

DOBBS: Oh, absolutely not, Marc. We have $550 billion current account deficit in this country.

ANDEREESSEN: Right, I'm telling you...

DOBBS: That is services that is products in -- I mean, Marc, let's -- let's go back to the issue of outsourcing. If you prefer.

ANDEREESSEN: Well, hold on a second. The president's economic report that just came out in 2002 we ran a $75 billion surplus in services.

DOBBS: In 2002?

ANDEREESSEN: We benefited services trade.

DOBBS: In 2002?


DOBBS: Do you release...


DOBBS: Marc, we can sit here and not really edify anyone including ourselves by trading statistics. The fact is it is 2004, the fact is in the most event report on trade we show for the first time negative numbers in the area in which you live, that is technology which is supposed to be bringing us all of these wonderful jobs that so far are not materializing.

ANDEREESSEN: Look, technology took a big hit in the last four years due to recession. When I was involved in creating the first Internet browser in 1993, I can tell how many Internet jobs there were, there were 200. I can tell you how many there are now, there's two million now. We created new jobs in the next 10 years. I'll tell you what, we're going to create a huge number of new jobs in the next 10 years.

DOBBS: I expect you to do so. What I don't expect you to understand is that there is no one listening to us that should take -- has any reason to take as you an article of faith that by moving jobs overseas simply to acquire cheap labor that in any way adds to innovation to this country.

ANDEREESSEN: Absolutely it does. It compounds innovation, allows American companies to invest both overseas and the U.S. It allows American companies to hire more people in the U.S. It allows American companies to sell their products and services into a larger global market. I tell you another thing, it encourages peace and stability worldwide. The best thing that can happen to us from a national security standpoint we determine to develop the middle classes in India and China. And in fact the really best thing we could do is to start offshoring to the Middle East.

If you want to systematicly go after global security and peace, figure out how to bring everybody into this world of increasing returns from economic, increasing returns from trade...

DOBBS: Marc, you surely not suggesting that we create a middle class anywhere in the world at the expense of our own?

ANDEREESSEN: Of course not. It's not at the expense of our own.

DOBBS: That's precisely the effect of what is happening.

ANDEREESSEN: No it's not.

DOBBS: No, sir, it is.

ANDEREESSEN: Trade has been win-win for 200 years.

DOBBS: Win-win. Marc, you are too smart for this. You are absolutely too smart for this. When you hear win-win, what do you think of, a software salesman, right?

ANDEREESSEN: Not at all.

DOBBS: Come on. If it's -- thank you. I also have a sense of humor like you do, Marc. You know what, I don't think we should have too much a sense of humor about what we're doing to hardworking men and women in this country. Please, would you take as an article of faith if you were sitting there driving code that you are going to get to a result or would you want to empiricly be able to demonstrate it?

ANDEREESSEN: Absolutely.

DOBBS: Here are the empirical demonstrations of what we're dealing with right now.

We have a half trillion dollar trade deficit. I'm sorry, go ahead. ANDEREESSEN: Empirical demonstration is over 200 years of standard of living has risen massively. We created 140 million net jobs. They say we created 342 million jobs in the last 10 years alone.

DOBBS: You do understand we have to talk in net terms.

ANDEREESSEN: Per capita income. We're up 17 million net new jobs in the 10 years, including the impact of the recession.

DOBBS: The last 10 years.

ANDEREESSEN: The last 20 years we're up 38 million net jobs. And those jobs per capita income, in that period of time, since World War II to today, per capita income is up. Everybody is better off.

DOBBS: By the way, if you are trying to convince me, our viewers, that it's good to live in America, that really isn't the issue. The fact is how do we preserve and improve on the quality of life for our middle class, for all Americans.

ANDEREESSEN: Economic growth is the key.

Would we agree economic growth is the key?

DOBBS: We -- I would agree absolutely that economic growth is the key.

ANDEREESSEN: We agree job creation is the key?

DOBBS: Absolutely.

ANDEREESSEN: Right, and this is what happens. We create jobs, grow, innovate, exploit new markets, we develop new markets.

DOBBS: But you haven't accounted for the experience of the past four years nor the failure of this economy through two and a half years since the recession ended to generate jobs and that is the critical issue, Marc.

ANDEREESSEN: Let's separate out. No. 1 in IT we had a big recession, right. We had a big bubble. We had a dotcom bubble.

DOBBS: Marc, I got to be honest with you. We have taken far more time than we should have. Come back, we're going to argue some more, do me a favor -- watch that, you know, faith based economics, will you?

hit's dangerous stuff, macro economics as well as it is in technology. You can reciprocate with counsel to me as well, Marc. You get the last word.

ANDEREESSEN: I reciprocate to you with exactly the same counsel, for 200 years the standard of living in this country has risen. and it's going to continue rising for the next hundred, I don't think there's any question about that. DOBBS: I admire your faith and we appreciate your time.


DOBBS: California State Senator Liz Figueroa says outsourcing threatens not only jobs but privacy. Next week she will hold a hearing on the impacting of outsourcing in Silicon Valley and elsewhere.

Senator Figueroa, joins me now from Sacramento California.

Good to have you with us, senator.

LIZ FIGUEROA (D), CALIFORNIA STATE SENATOR: Thank you for having me, Lou.

DOBBS: Senator, the legislation that you've introduced in terms of outsourcing, to prevent the state from using outsourcing, overseas, what has been the reaction?

FIGUEROA: Well, it's been a very positive one. I have to respond to my constituents in the state of California and the residents of California and the -- I don't have great faith that Mr. Andreessen has. And I think most of the residents of California don't have the millions of dollars in their bank account to have that kind of faith. They have to worry about making the mortgage payment and putting their kids through college. And right now my constituents are losing jobs on a daily basis, jobs that are not coming back to the state of California. We are concerned right now not only with the trends of outsourcing, we're very concerned about privacy issues.

Medical privacy issues, I wrote some strongest legislation in the state of California, outsourcing undermines all the work we've done. We're also concerned with financial information. Right now millions of Americans are working on preparing their tax forms. They don't know that there are many, many companies that are outsourcing the most private of information that people in the United States believe that it is someone in California that is preparing them for their eyes only. And the word is that this information is being outsourced. And I am responsible for my constituent I'm going to fight the outsourcing that is done in a way that's disrespectful to my constituent.

DOBBS: Your constituents in Silicon Valley, there are more jobs being created in Bangalor than there are in Silicon Valley.

How big is the pain in Silicon Valley?

Because one of the things that we hear is that there aren't enough qualified programmers, software programmers to actually meet the demand.

What is your judgment on that issue?

FIGUEROA: Well, Lou, we know that the state of California, the last nine years, has been sending 52 percent of its general fund in higher education. And we will continue to meet the needs of our industry. But, if it indeed that is true, then maybe we should ask some of these companies that are making great deal of profit to take a percentage of that profit and put it into our educational system so our students can benefit from the money and then we will solve the problem of not having the educational force they say is deterring them from having our children have those jobs.

DOBBS: Give us your best assessment, we have just about 15 seconds here, I apologize for the shortness of the conversation, but...

FIGUEROA: We're very concerned.

DOBBS: Do you believe that your legislation will pass with great difficulty, with ease?

Give us some sense of it on both protecting privacy and restricting outsourcing by the state of California?

FIGUEROA: Well, as the chair of the Senate Business and Professions and also the chair of the International Trade Policy Committee, I believe that having this hearing on Tuesday will give us a better understanding of exactly what numbers and what we're working with. But I believe that once we give a clear message to our residents of what is happening with their medical information, their financial information, that it will translate on getting a great deal of support for the pieces of legislation.

Senator Liz Figueroa we appreciate you being here. And I look forward to talking to you soon follow your hearing.

FIGUEROA: Thank you, Lou. And thank you for taking interest in the very important issue.

DOBBS: Thank you very much.

Tonight's thought is on commerce. "The common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality." Those are the words of economist Ludwig von Mises.

We saw a cartoon we also wanted to share with you tonight, on a somewhat amusing perspective, we think, on the recent motivation to put a stop to the exporting of American jobs especially in this election year.

The cartoon reads, "I'm frankly fed up with writing the $2,000 checks to lawmakers to get them to do what I want. Alice, find out if we can get some lawmakers in India to do it for $200."

The response from the assistant. "Suddenly, there's a law against it." Our thanks to cartoonist Tom Tolls (ph) of the "Washington Post."

When we continue here, the focus on President Bush's economic record intensifies. He says the job base is beginning to expand. We'll have a live report for you from California. U.S. marines policing the streets in Haiti to protect the capital city from rebels. We'll be talking with General David Grange on point next. Please stay with us.


DOBBS: In "Grange On Point" tonight, the crisis in Haiti. Marines appear to be expanding their mission from protecting American interests in Haiti, to stopping reprisals against Haitian citizens. In other words, marines appear to be doing police work. General David Grange joins us now. General, is this another example of Mission Creep, if you will?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: I don't think so, Lou. The marines went down on a Chapter 7 peace enforcement operation along with this multinational interim force involving some other nations. The initial priorities were to protect U.S. citizens and properties that would be the U.S. embassy and then now they have evolved into the next phase of the operation which is to protect some of the Haitian people through the role of security. Of establishing some sort of rule of law around the capital and other places. So it is part of their mission.

DOBBS: The stories about, well, that Aristide is suggesting that the United States effectively kidnapped him. What is your best judgment on that?

GRANGE: A desperate man. Aristide signed legislation to leave the country. Now he was persuaded I think a little bit by the United States and France to do so. But then he was offered protection by state department officials and U.S. marines to move to the airport to flee the country. If that was not done, I would imagine that there was a good chance that he would have been killed.

DOBBS: Let's turn to Iraq, if I may, General. Jamie McIntyre reported tonight that the number of American deaths had dropped by about a third last month as opposed to the previous but the number of attacks against Iraqis had escalated significantly. Is the United States in your opinion going to have to take a more active role in security for the Iraqis themselves.

GRANGE: Right now the transition to Iraqis taking up more security responsibilities from the U.S. and other coalition forces must proceed. What you have right now is the insurgents especially the outside terrorist influence are quite desperate. It is starting to work. It is actually starting to work the transition of some type of Iraqi governance. And they're scared.

And so this is an effort to try to change people's minds. I don't think it is going to work. I think a lot of the Iraqi people themselves are getting fed up with it. Where you see hostilities still to coalition forces is disinformation opposed upon them by those that planned the attacks. I think it is working it is hard to get good solid measurements effectiveness besides looking at body counts, dead people, and that's not really the whole issue to look at to how it is working. DOBBS: General David Grange, thank you, sir.

A reminder to vote in tonight's poll. The question, "do you believe we should vigorously be enforcing our immigration laws? Yes or no." Cast your vote at We'll have the results coming up just a little later in the broadcast.

Two days after Senator John Kerry effectively won the Democratic presidential nomination, a new poll shows him in a statistical dead heat with President Bush. The "Associated Press" poll shows President Bush now has the support of 46 percent of those Americans surveyed while 45 percent polled support Senator Kerry.

Independent candidate Ralph Nader who joined the race a week and a half ago is next with 6 percent and that in the minds of many, I'm sure, validates Democratic concerns about the entry of Nader into this contest.

President Bush today tried to seize the initiative in the intensifying debate about the pace of job creation in this country. The president said the job base is expanding and the economy is strengthening. The president's economic record is becoming one of the most important issues in his battle to stay in the White House. White House correspondent Dana Bash is traveling with the president, joins me now from Mountain View, California -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, the president pressed his case with California voters on jobs and the economy. Today saying that families and businesses have been faring better lately and saying jobs are on the way. And the economy has been a major part of the president's new highly partisan stump speech he has been giving over the past couple of days here in California. Attacking John Kerry on the economy, on tax cuts, saying that that is one of the ways that Senator Kerry, he believed, would take the country down the wrong path and would reverse the policies he says are actually helping the country.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent has plans for those tax cuts. He wants to take them away. He would use that money to expand the federal government. I have a better idea. To keep this economy growing and to create jobs, the tax cuts must be permanent.


BASH: Now, another issue the president is playing up in his speeches here in California, and in his new ad campaign that started today is the kind of strong leader he says he's been in the wake of September 11. And the images that that has evoked in the new ads is really been creating an uproar among some family members of the victims in September 11 -- of September 11, firefighters and even some Democrats who call it crass to play up the tragedy for political gain and even some calling it fear mongering. But the Bush campaign is standing by the ads saying they are entirely appropriate. (BEGIN VIDEO CLIP)

MATTHEW DOWD, BUSH-CHENEY STRATEGIST: 9/11 was a huge challenge, it's a pivotal moment in this country. It was a terrible tragedy. And how the president handled that and what the country went through in that tragedy and it's aftermath is part of the fabric of the nation.


BASH: Now Democrats are clearly hoping the use of these images in the new ads are going to backfire against Mr. Bush as he plays up 9/11 to here through the convention in early September in New York. As a pivotal moment as you just heard Bush senior advisers say in his presidency. But Republicans are saying from his campaign that if Democrats want to talk about 9/11, which they still think is a big plus, in terms of the way Mr. Bush handled himself that's fine with them. Back to you, Lou.

DOBBS: Dana, thank you very much. Dana Bash reporting from Mountain View, California.

Senator Kerry's campaign today said President Bush's economic policies have failed California. The campaign issued a news release to coincide with the president's visit. It said that more than 300,000 Californians have lost their jobs since the president took office and unemployment in the state has risen by 36 percent.

Senator Kerry, for his part today, took off from campaigning. Tomorrow he will be in Louisiana ahead of its primary next Tuesday. Coming up, we'll share some of your thoughts about exporting America.

Also ahead the eye in the sky, the battle to save Hubble from what many say would be an untimely demise. Hubble which has brought so many spectacular image of space to us. Those stories and more coming up next. Please stay with us.


DOBBS: Taking a look now at some of your thoughts.

Terry Creekmore of Winthron Harbor, Illinois, "unfortunately our leaders in the White House and Congress do not understand what so many Americans do, that losing good paying jobs to India for minimum wage jobs here at home doesn't help our country, it destroys it."

Samir Mehta of Yorbalinda, California, "I'm an immigrant from India and also a software engineer. I believe American tax dollars must be spent at home, not in India or China."

Chris Michot of Hyde Park, New York, "Lou, I entered college in 1998 and fell in love with computer science. The closer I got to my graduation date, the faster the job opportunities diminished. I'm now back in school at the Culinary Institute of America learning to cook, hopefully the talent to create an amazing meal won't be exported." A.J. Sharma of Houston, Texas, "we live in a global economy. We as Americans don't have a god given right to have a job. Am I afraid that I may lose my job? Yes. But I am also confidant that I will find a new job. I believe exporting jobs today will only make us better tomorrow.

Ted Crumpet of Bethesda, Maryland, "Lou, you worry too much. When we all get down to the level of Bangladesh there will be no where to go, but up."

And Donna Page of Orleans, Massachusetts, "as a progressive minded social worker, I never thought a conservative news program like your would become the one news program I could count on to address the pressing social and economic needs we're currently facing."

Donna, we're glad that you do join us.

We love hearing from you. Email us at

Turning now to other news, members of Congress tonight are joining a chorus of scientists and other Americans calling upon NASA to save the Hubble space telescope. Congressman Marc Udall of Colorado introduced a resolution that urges NASA to set up an independent panel to study whether Hubble should survive, whether it can survive.

Earlier this year NASA canceled all remaining shuttle missions to Hubble saying the missions are simply too dangerous. The House resolution calls Hubble, NASA's most productive mission in the past 20 years.

Another of NASA's most successful missions today sent back spectacular new pictures of Mars. Opportunity rover photographed a new rock that NASA hopes will confirm its earlier finding that water once drenched the red planet.

Looking at other news in brief tonight, dozens of gay couples seeking marriage licenses were turned away today at the New York City clerk's office. Instead the couples received letters explaining that gay marriages are legal. The letter stated New York State law does not authorize this office to grant marriage licenses to same sex couples.

Turning to weather, severe storms are whipping across the state of Texas tonight. Winds of up to 80 miles an hour knocked down power lines and overturned trucks and mobile homes in several counties there. Tornadoes and flood watches were issued throughout the day.

Clear Channel Communications today said it will pay a fine of more than $700,000 for the airing of indecent material on four of its radio stations. Clear Channel said it accepts responsibility for airing inappropriate content on the broadcasts of radio personality called Bubba The Love Sponge.

A reminder to check our Web site for the complete list of companies we've confirmed to be exporting America, Coming up next, the results of our poll tonight. And we have another great show planned for tomorrow, which we hope you will join us for. We'll be telling you all about it in just a moment. Stay with us.


DOBBS: The results of our poll tonight. 94 percent of you say -- I think we could call that an overwhelming majority -- say that we should vigorously enforce our immigration laws. 6 percent say you do not.

That is our show for this evening. We thank you for being with us. Please join us tomorrow. Congressman Bob Menendez, the highest ranking Hispanic member of Congress will be here to discuss the president's amnesty program for illegal aliens. And Mount Doud (ph) a polling strategist for the Bush-Cheney campaign joins us on the road to election, or reelection, if you prefer.

And workers march on Washington to fight back the exporting of American jobs to cheap overseas labor markets.

Please join us tomorrow. Thanks for being with us tonight. For all of us here, good night from New York. "ANDERSON COOPER" is next.


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